Laszlo Zsolnai Corvinus University of Budapest Why Buddhist Economics? Buddhism and economics are seem to be far from one another. Many people think that Buddhism is an ascetic religion with no interest in worldly affairs. It is not true. Buddhism has a well- developed social facet. Buddhists are often engaged in progressive social change. Buddhism poses a radical challenge for mainstream economics because denies the existence of the self. The Western way of life is centered on self-interest understood as satisfaction of the wishes of one’s body-mind ego. Buddhism challenges this view by a radically different conception, that is “anatta”, the “no-self”. Anatta specifies the absence of a supposedly permanent and unchanging self. What is normally thought of as the “self” is an agglomeration of constantly changing physical and mental constituents which give rise to unhappiness if clung to as though this temporary assemblage. The “anatta” doctrine attempts to encourage the Buddhist practitioners to detach themselves from the misplaced clinging to what is mistakenly regarded as self, and from such detachment (aided by wisdom, moral living and meditation) the way to Nirvana is able to be traversed successfully. Modern neuroscience supports the Buddhist view of the self. What neuroscientists discovered can be called the selfless (or virtual self), “a coherent global pattern, which seems to be centrally located, but is nowhere to be found, and yet is essential as a level of interaction for the behavior”. The non-localizable, non-substantial self acts as if it were present, like a virtual interface. (Varela, F.J. 1999: p. 53. and 61.) Buddhism suggests not to multiply but to simplify our desires. Above the minimum material comfort, which includes enough food, clothing, shelter and medicine, it is wise to try to reduce one’s desires. Wanting less could bring substantial benefits for the person, for the community and for nature.
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Laszlo Zsolnai
Corvinus University of Budapest
Why Buddhist Economics?
Buddhism and economics are seem to be far from one another. Many people think that Buddhism
is an ascetic religion with no interest in worldly affairs. It is not true. Buddhism has a well-
developed social facet. Buddhists are often engaged in progressive social change.
Buddhism poses a radical challenge for mainstream economics because denies the existence of
the self. The Western way of life is centered on self-interest understood as satisfaction of the
wishes of one’s body-mind ego. Buddhism challenges this view by a radically different
conception, that is “anatta”, the “no-self”.
Anatta specifies the absence of a supposedly permanent and unchanging self. What is normally
thought of as the “self” is an agglomeration of constantly changing physical and mental
constituents which give rise to unhappiness if clung to as though this temporary assemblage. The
“anatta” doctrine attempts to encourage the Buddhist practitioners to detach themselves from the
misplaced clinging to what is mistakenly regarded as self, and from such detachment (aided by
wisdom, moral living and meditation) the way to Nirvana is able to be traversed successfully.
Modern neuroscience supports the Buddhist view of the self. What neuroscientists discovered
can be called the selfless (or virtual self), “a coherent global pattern, which seems to be centrally
located, but is nowhere to be found, and yet is essential as a level of interaction for the
behavior”. The non-localizable, non-substantial self acts as if it were present, like a virtual
interface. (Varela, F.J. 1999: p. 53. and 61.)
Buddhism suggests not to multiply but to simplify our desires. Above the minimum material
comfort, which includes enough food, clothing, shelter and medicine, it is wise to try to reduce
one’s desires. Wanting less could bring substantial benefits for the person, for the community
and for nature.
1. The Emergence of Buddhist Economics
In the 1950s and 1960s British economist E. F. Schumacher was working as an economic advisor
in South-East Asia. He realized that the Western economic models are not appropriate for
Buddhist countries because they are based on a different metaphysics than that of the Far-Eastern
worldviews.
The main goal of a Buddhist life is liberation from all suffering. Nirvana is the end state, which
can be approached by want negation and purification of human character. In his best-selling
book “Small is beautiful” Schumacher states that the central values of Buddhist economics are
simplicity and non-violence. (Schumacher, E. F. 1973) From a Buddhist point of view the
optimal pattern of consumption is to reach a high level of human satisfaction by means of a low
rate of material consumption. This allows people to live without pressure and strain and to fulfill
the primary injunction of Buddhism: “Cease to do evil; try to do good.” As natural resources are
limited everywhere, people living simple lifestyles are obviously less likely to be at each other's
throats than those overly dependent on scarce natural resources.
According to Buddhists, production using local resources for local needs is the most rational way
of organizing economic life. Dependence on imports from afar and the consequent need for
export production is uneconomic and justifiable only in exceptional cases. For Buddhists there is
an essential difference between renewable and non-renewable resources. Non-renewable
resources must be used only if they are absolutely indispensable, and then only with the greatest
care and concern for conservation. To use non-renewable resources heedlessly or extravagantly
is an act of violence. Economizing should be based on renewable resources as much as possible.
Buddhism does not accept the assumption of man's superiority to other species. Its motto could
be “noblesse oblige”; that is, man must observe kindness and compassion towards natural
creatures and be good to them in every way.
Schumacher concludes that the Buddhist approach to economics represents a middle way
between modern growth economy and traditional stagnation. It seeks the appropriate path of
development, the Right Livelihood for people.
From the 1970s Schumacher's conception of Buddhist economics became popular in the West,
especially among the members of alternative and environmental movements. It was gradually
recognized that Buddhist economics is not only relevant for Buddhist countries but can help
Western countries to solve the problems of overconsumption, welfare malaise and destruction of
nature.
Buddhism recommends moderate consumption and is directly aiming at changing one’s
preferences through meditation, reflection, analyses, autosuggestion and the like. French
economist Serge-Christopher Kolm developed a formal model to treat consumption and
meditation together. (Kolm, S-C. 1985)
In a simplified form his model is as follows. Let “u” represents one’s well-being (or “sukha”).
Let “c” and “tm” represent consumption and meditation. These variables are linked by the
relation u = u (c, tm).
The acquisition of consumption goods takes time, because labor is involved in producing them or
needs to earn money to buy them. Let this length of time be “ta”. The quantity of c is an
increasing dependent variable of this, so c = c(ta).
We then have u = u [c(ta), tm]. Time should be divided between working for consumption and
meditation. What is the optimal allocation between these two activities? The Buddha says that
the optimum is some meditation to lower the desire for consumption and to be satisfied with less,
and some consumption and thus to work that it entails. This is the “Middle Way”. In economic
terms this means “the marginal productivity of labor involved in producing consumption is equal
to the marginal efficacy of the meditation involved in economizing on consumption without
altering satisfaction”. (Kolm, S-C. 1985: pp. 240-242.)
Desiring less is even fruitful in the case of money. In the West people presuppose that more
money is better than less money. But, getting more money may have negative effect. Overpaid
employees and managers do not always produce high-level performance.
Being under financed might be beneficial for a project. If people have smaller budget they may
use the money more creatively and effectively. The Buddha had no budget at all for financing his
mission.
Another seminal contribution to Buddhist economics was made by the Thai Buddhist monk and
philosopher Ven. P. A. Payutto in his book “A Middle Way for the Market Place”. (Payutto, P.
A. Ven. 1992)
Payutto argues for a spiritual approach to economics. He believes that Buddhism is well suited to
this task because the Buddhist teachings offer profound insights into the psychology of desire
and the motivating forces of economic activity. These insights can lead to a liberating self-
awareness that slowly dissolves the confusion between what is truly harmful and what is truly
beneficial in production and consumption.
Buddhism recognizes two different kinds of wanting: (1) tanha, the desire for pleasure objects;
and (2) chanda, the desire for well-being. Tanha is based on ignorance, while chanda is based on
wisdom. Tanha and chanda both lead to satisfaction, but of different kinds. Using the example of
eating, people who are driven by tanha will seek to satisfy the blind craving for sensual pleasure,
which, in this case, is the desire for pleasant taste. Here, satisfaction results from experiencing
the flavor of the food. But when guided by chanda, desires are directed to realizing well-being.
We are not compelled to overeat or to eat the kinds of foods that will make us sick simply
because they taste good. Instead, we eat to satisfy hunger and nourish the body. Here satisfaction
results from the assurance of well-being provided by the act of eating. We enjoy our food, but
not in such a way that leads to remorse.
Payutto stresses that from the Buddhist point of view, economic activity should be a means to a
good and noble life. Production, consumption and other economic activities are not ends in
themselves; they are means, and the end to which they must lead is the development of well-
being within the individual, within the society and within the environment. Given that there are
two kinds of desire, chanda and tanha, it follows that there are two kinds of value, which we
might term true value and artificial value. True value is created by chanda. In other words, a
commodity's true value is determined by its ability to meet the need for well-being. Conversely,
artificial value is created by tanha – it is a commodity's capacity to satisfy the desire for pleasure.
Buddhism distinguishes between two kinds of consumption, which might be termed “right”
consumption and “wrong” consumption. Right consumption is the use of goods and services to
satisfy the desire for true well-being. Wrong consumption arises from tanha; it is the use of
goods and services to satisfy the desire for pleasing sensations or ego-gratification.
At the heart of Buddhism is the wisdom of moderation. According to the Buddhist approach,
economic activity must be controlled by the qualification that it is directed to the attainment of
well-being rather than the “maximum satisfaction” sought after by traditional economic thinking.
In the mainstream economic model, unlimited desires are controlled by scarcity, but in the
Buddhist model they are controlled by an appreciation of moderation and the objective of well-
being. The resulting balance will naturally eliminate the harmful effects of uncontrolled
economic activity.
Whenever we use things, be it food, clothing, paper or electricity, we can take the time to reflect
on their true purpose, rather than using them heedlessly. By reflecting in this way we can avoid
heedless consumption and so understand “the right amount”, the “middle way”. We also come to
see consumption as a means to an end, which is the development of human potential. With
human development as our goal, we eat food not simply for the pleasure it affords, but to obtain
the physical and mental energy necessary for intellectual and spiritual growth toward a nobler
life. Buddhist economics understands that non-consumption can also contribute to well-being.
Though monks eat only one meal a day, they strive for a kind of well-being that is dependent on
little. However, if abstinence did not lead to well-being, it would be pointless, just a way of
mistreating ourselves. The question is not whether to consume or not to consume, but whether or
not our choices lead to self-development.
Production is always accompanied by destruction. In some cases the destruction is acceptable, in
others it is not. Production is only truly justified when the value of the thing produced outweighs
the value of that which is destroyed. In some cases it may be better to refrain from production. In
industries where production entails the destruction of natural resources and environmental
degradation, non-production is sometimes the better choice. To choose, we must distinguish
between production with positive results and production with negative results; production that
enhances well-being and that which destroys it. In this light, non-production can be a useful
economic activity. A person who produces very little in materialistic terms may, at the same
time, consume much less of the world's resources and lead a life that is beneficial to the world
around him or her. Such a person is of more value than one who diligently consumes large
amounts of the world's resources while manufacturing goods that are harmful to society.
Payutto summarizes the major characteristics of Buddhist economics as follows:
(i) realization of true well-being
The Middle Way, the right amount and knowing moderation and all of these terms may be
considered as synonyms for the idea of balance or equilibrium. Knowing moderation means
knowing the optimum amount, how much is “just right”. This optimum point, or point of
balance, is attained when we experience satisfaction at having answered the need for quality of
life or well-being.
(ii) not harming oneself or others
From a Buddhist perspective, economic principles are related to the three interconnected aspects
of human existence: human beings, society and the natural environment. Economic activity must
take place in such a way that it doesn't harm oneself (by causing a decline in the quality of life)
and does not harm others (by causing problems in society or imbalance in the environment).
In his book “Putting Buddhism to Work” former Japanese banker and economic thinker Shinichi
Inoue presented his view of economics and Buddhism. (Inoue, S. 1997)
Influenced by Zen Buddhism Inoue claims that Buddhist motivation for work must be the pursuit
of the interests of both oneself and others. So one should not engage in business that does not
serve the world and then brag about being a philanthropist. Buddhist economics does not have
profit as its principal goal. Instead, its primary objective is to serve the community. Profit will
come, but it is a by-product rather than the main goal.
Inoue emphasizes that to live necessarily involves the taking of life of other beings. We cannot
change that, but we can limit how many lives we take and to what extent we allow our desires to
be satisfied. Gratitude toward other beings and a sense of regret about harming others are crucial
principles in Buddhist economics. It calls for the environmental and social assessment of
products and industries which is a highly developed practice in Japan.
Both production (P) and consumption (C) have to be considered. Production can be ranked
according to four levels:
P1 = production that has a negligible negative impact on the environment,
P2 = production that has a minimal negative impact on the environment,
P3 = production that has some negative impact on the environment,
P4 = production that involve a great deal of negative impact on the environment.
Consumption can be assessed on a four-rank system:
C1 = consumption of goods that are vital for human existence,
C1 = consumption of goods that, while not absolutely necessary, make living more tolerable,
C3 = consumption of goods that are not very necessary,
C4 = consumption of goods that are frivolous or even harmful.
Table 2 presents the combination of these variables in order to determine whether the production
of a product is relatively earth-friendly and the consumption of a product is truly necessary.
Lower the number associated with a combination, the better it is for the environment and society.
Table 2 Environmental and social assessment categories for production and consumption
P1 P2 P3 P4
C1 1 2 3 4
C2 2 4 6 8
C3 3 6 9 12
C4 4 8 12 16
In the Buddhist view any economic enterprise is located in the context of the entire natural
universe, therefore ignoring environmental and social costs appears to be quite absurd. Economic
efficiency must be redefined in the form of “not wasting”. It carries with the goal of living
happily in a simple way. For example, although recycling costs time and money, and may seem
inefficient and troublesome, ultimately we are being more efficient by recycling and not wasting
products. This is because any given product exists in relationship to the earth and human society
as a whole. A recycling culture is economically sound.
Hong Kong based British economist Richard Welford made some further contributions to
Buddhist economics. (Welford, R. 2006)
Richard Welford stresses that Buddhist philosophy turns the whole Western mindset upside
down. In contrast to the anthropocentric worldview commonly characterized by Western culture,
the Buddhist cosmology has the entire universe at its center. Human beings are humble in the
totality and are just grains of sand in the vast, limitless ocean of space.
The Four Noble Truths of Buddhism address the dynamics of human suffering and give us a
starting point for moving beyond the barrier of over-consumption. We can see the Four Noble
Truths as typifying the problems in the achievement of sustainable development:
1. Life is suffering. This has to be comprehended. With increasing secularism and
dissociation from nature and the environment, and rising levels of expectations inside and
outside work, people are becoming less satisfied with life and the lifestyles they adopt.
2. The cause of suffering is desire. Unchecked desire has to be abandoned. Heightened
levels of dissatisfaction have implications for consumerism: first, there is the erroneous
perception that purchasing goods is going to make us happy, and second, because we are
increasingly dissatisfied and thus unhappy or stressed, we are unable to deal with the changes
needed.
3. The cessation of suffering is the cessation of desire. This has to be realized. By becoming
aware that there is a root to the general societal malaise of avoiding environmental and social
responsibilities, we know that there is a way of stopping such complacency to begin a path to
sustainability.
4. The path to the cessation of desire is practice. To stop doing what makes us dissatisfied,
we have to realize the cause of that dissatisfaction and keep trying to behave in a more
sustainable manner. Buddhism shows us that this is difficult and requires ongoing commitment
and practice.
Buddhism points out that even if one attains what one desires in the short run, greater desires
always emerge. The ego mindset cannot be fulfilled and its greed for more satisfaction and
recognition becomes the source of its own destruction. This becomes a source of suffering
because the human spirit becomes captured by the avaricious mind.
Happiness might be seen as the ratio between wealth and desire. The capitalist system has been
successful in increasing levels of wealth and thus increasing happiness to some extent. But
through the epiphenomenal increase in people’s desires for more, stoking up avarice and greed,
capitalism has not produced great increases in happiness overall. The Buddhist approach
suggests that people reduce their desires so that even the maintenance of current wealth increases
happiness. As people become detached from desires, their levels of happiness will increase. This
may result in a reduced demand for consumer goods. It is an opportunity for businesses to
concentrate less on providing non-essential consumer goods and more on providing essential
goods and services to developing countries, introducing technologies that will remediate
environmental damage and serve the poor and needy. Indeed, business will then become less
exploitative and damaging and more worthwhile and productive.
Welford states that Buddhism can be the source of greater individual contentment and
satisfaction and that this is more consistent with protecting nature and caring for the
environment. There is a need to move away from mass-consumption economies toward a more
environmentally restorative one.
While Western economics emphasizes self-interest and material development, Buddhist
economics stresses interconnectedness and “inner development”. It would also place an emphasis
on culturally appropriate economic approaches. A Buddhist approach involves an emphasis on
sustainable development, where both human beings and living creatures can realize their
potential, and where inner development and economic development are compatible, all in the
context of a just society and a healthy ecosystem.
Buddhist economics sees little problem with activities that are beneficial to oneself, to one’s
business and to one’s country, but only in circumstances of non-harmfulness to others.
Establishing mutually beneficial transactions rather than exploitative ones is important. One
distinguishing feature of Buddhism is that its adherents have never engaged in a religious war. Its
emphasis on peace and non-harm needs to be translated into modern economics. Non-harm
means respecting all human beings and all other creatures and developing a sense of respect for
all life.
An economics based on respect would certainly help to reverse the mounting ecological crisis.
Economics should be based on notions of fair “give and take”. If we are going to take something
from the environment, we must be prepared to ensure that it can be replaced in one way or
another. We need to develop a restorative economy where whatever damage is done to the
environment is either restored or fully compensated for.
In his publications Thai economist Apichai Puntasen connects the Buddhist conception of
happiness with Aristotle’s concept of human flourishing. (Puntasen, A. 2005, 2007)
Aristotle differentiated necessities needed for survival and the higher value for flourishing of life
known as “the good life”. He explained further that “the good life” is the moral life of virtue
through which human beings attain “happiness”. The economic dimension involved was the role
in supplying “wealth” through the production process in order to meet basic needs as well as to
attain “happiness” or “the good life”. The wealth that performs such a function has its “use”
value, because it is useful to people. However, there is also another side of the coin, that is the
“exchange” value. This value is determined in the market and originated from market demand
driven by “desirability”. Aristotle did not advocate for “exchange” value since it was driven by
desirability and not by necessity or “the good life”. This position is close but not the same as that
of the teaching of the Buddha.
Because of the varying meanings of “happiness”, Puntasen suggests to use the word sukha drawn
from the teaching of the Buddha. The closest word to sukha is “wellness”.
There is also a range of meanings for the word “sukha”. It implies the state where pain is reduced
from its original level. Less pain implies more sukha. On the other hand, pleasure does not
necessarily imply less pain. Most of the time, pleasure and pain are different sides of the same
coin.
Sukha from acquisition is a lower level of sukha. It can be the same as hedonism. However, at
this level of sukha, the Buddha qualified it, namely, it must not cause any burden for one-self or
any other living beings. Even with this qualification the Buddha recommended the attainment of
a higher level of sukha. It is sukha from non-acquisition. It can be sukha from giving, from
meditation, or from helping others to be relieved from pain. The highest level of sukha is derived
from being emancipated or liberated from all impurities of mind or all the defilements.
A person, who has no pain, does not have to suffer. It can be seen then that sukha in Buddha-
Dhamma, in the teachings of the Buddha, is more associated with mental development than with
any form of acquisition. The most important tool to achieve this mental stage is through training
of the mind to reach the stage of panna, the ability to understand everything in its own nature.
Therefore, pañña is instrumental in being relieved from pain. With no pain, it will be sukha or
wellness of the mind as well as the body.
Puntasen suggests that the mode of production in Buddhist economics can be defined as panna-
ism. Panna is the supreme quality of the mind. It means the ability to understand everything in its
own nature. Human beings who have panna do not seek to maximize pleasure or utility but seek
to be relieved of and relieve others of pain as much as possible. With less pain there will be more
peace and wellness.
Panna should be used to control all factor of inputs, such as technology, capital and natural
resources. The production process should be done in such a way to enhance the good qualities of
human inputs. The process should generate human skills and creativity as well as provide a sense
of fulfillment from their work. Workers should not feel that they are being exploited but rather
given opportunities to do something worthwhile for themselves as well as others. Minimal use of
non-renewable resources should be constantly practiced, while use of renewable resources
should be encouraged in place of non-renewable resources as much as possible. Waste from the
production process should be kept at a minimum. Every attempt should be made to improve
nature and environment at the same time. The need for production to be increased to meet
increased demand for consumption is not required in Buddhist economics, since consumption
will also be in moderation. As only moderate consumption in everything is needed, the rest can
be given or donated to others who are still in need. Peace and tranquility are results of the ability
to understand everything in its own nature or having panna. Such knowledge will result in more
understanding of the world, as well as the understanding of “nothingness” or “voidness” and no
self to cling on to, the main cause for pain. This way excessive production is not needed.
The main purpose of Buddhist economics is to reduce pain or suffering for all living beings as
much as possible. Buddhist economics insists that priority goes to those that are still in pain
because of inadequate materials to support their lives. Those who have more panna should only
use what they need to maintain their own lives and give the rest to the more needy ones.
2. The Structure of the Book
The present book collects fresh contributions from economists and business scholars engaged in
different Buddhist traditions, namely Tibetan Buddhism, Zen Buddhism, Theravada Buddhism
and Western Buddhism. The first part of the book “Buddhist Ethics Applied to Economics”
consists of theoretical and empirical papers which address issues of economic behavior and
economic institutions in contemporary context. The second part of the book “Achieving
Happiness and Peace” consists of analytical and normative contributions which deals with
economic policy and organizational practice.
In her paper The Relational Firm: A Buddhist and Feminist Analysis economist and feminist
scholar Julie Nelson (University of Massachusetts) emphasizes that Buddhism represents a
relational ontology. In Buddhist philosophy, what really “is” are relations and processes. Things
exist in a state of dependence on the relations that constitute them. The diversity and elaboration
of these relations and processes has value. The intrinsic worth of relationality, and the
responsiveness of humans to this worth through gratitude, compassion and care, form the basis
for ethics which permeates the ground of being.
The insights of relationality extend to big, human-made and materially oriented institutions such
as corporations and economies. Recognition of symmetric mutuality opens our thinking to ways
in which co-workers might treat one another with respect. The recognition of asymmetric
mutuality further opens up the possibility of thinking about relations of respect among people
with different levels of power and different roles. Not all workers in an enterprise have equal
abilities in leadership, inventiveness or finance. Enterprises can be structured in ways that take
advantage of people’s different qualities of power, while still retaining a fundamental attitude of
mutuality.
Julie Nelson argues that limiting possible relationships to either arms-length contracts or
hierarchical control rules out the idea that values, group identity, mutuality, non-hierarchical
structures or ethics could play a role within and among contemporary business organizations. Yet
the evidence on employee behavior suggests otherwise. Real humans do not simply leave their
needs for social relations, their values, their loyalties and their creativity at the workplace door.
People work better when they are supported, empowered and allowed to draw on their own
creativity than when they are consistently treated as potential shirkers who have to be brought
under control.
Buddhist thinking does not prescribe replacement of for-profit businesses with systems of small-
scale and cooperative enterprises as the cure for economic suffering – concludes Julie Nelson.
The ethical merit of organizations cannot be pre-judged on the basis of size alone or by the
purposes written on their articles of incorporation. Organizations must be evaluated by what they
do. Small, purportedly “loving” families are often the sites of domestic violence. Small non-
profit hospitals often exploit their own workers for the sake of keeping costs in line. Large, for-
profit corporations have at times taken actions that show that they can be good workplaces and
responsible members of social and environmental communities – when given a chance and
especially when encouraged in these directions by consumer, shareholder and political activism.
In his paper Buddhism and Sustainable Consumption Australian environmental economist Peter
Daniels (Griffith University, Brisbane) aims to identify and discuss how the Buddhist worldview
can inform and enrich the efforts to modify consumption into “sustainable consumption” forms
that can bring about and sustain better quality of life and well-being for humans and the living
environment. The emphasis is deliberately placed upon consumption or demand-side activities
but this is not meant to disparage the important and interconnected role of production. Together
production, consumption and exchange form the essence of economics as the study of livelihood
activities and how people, communities and societies manage, distribute and utilize their scarce
human and natural resources in the process of “earning their living”.
Daniels begins with an overview of the concept and the meaning of sustainable consumption, its
role in the general paradigm of sustainable development and its general links to the concerns of
Buddhism. After discussion of the need for an ethical basis for a more profound shift towards
sustainability, the paper details some of the major themes, commonalities and beneficial
exchanges of ideas between the Buddhist world view and sustainable consumption. Linking
sustainability and Buddhist notions Daniels describes some approaches for assessing
consumption in terms of its environmental and “karmic” disturbance impact. Some of the studies
of problematic modes of consumption are reviewed and major conclusions are presented
examining the primary strategic needs for achieving sustainable consumption in light of the
Buddhist economic perspective.
In her paper Economic Sufficiency and Santi Asoke economic sociologist Julia Essen (Soka
University of America) argues that to ensure a just and sustainable future for all, the dominant
forms of economic thought and practice must be reunited with ethics that are more caring of the
human-nature base. Lessons may be learned from alternative economic models based on
religious, spiritual, environmental or feminist values regarding the content, the process and the
potential results of such a shift. Julia Essen’s paper presents two Buddhist economic models: the
Royal Thai Sufficiency Economy Model and the approach adopted by the Santi Asoke Buddhist
Reform Movement of Thailand.
Sufficiency Economy which operates on the principles of moderation, reasonableness, self-
immunity, wisdom and integrity, was publicly introduced by the King of Thailand following the
1997 economic crisis and is now championed by the UNDP. The model has succeeded in
fostering well-being at the individual, firm, community and regional levels across rural and
urban sectors and shows promise for national policy due to its ability to coexist with capitalist
economic strategies. Asoke Movement is not as likely to propagate widely: its intentional
communities aim to release material attachment and attain spiritual freedom, and in doing so,
they exhibit ascetic tendencies and a biting critique of capitalism. However, Asoke Movement
does offer more explicit social and environmental ethics.
Both Buddhist models suggest that development must start with the individual, particularly in
terms of mental development. At the same time, as manifestations of a hierarchical philosophy,
both allow for guidelines and policies to be issued from above so leaders may speed the “right
development” of their constituents. The hierarchical aspect may have a downside in that it may
reproduce structural inequalities that result in uneven distribution of economic costs and benefits.
Julia Essen concludes that as a fix, an ethic to promote social equality and equity must be more
clearly articulated.
In his paper Pathways to a Mindful Economy institutional economist Joel C. Magnuson (Portland
Community College, Oregon) introduces the conception of Mindful Economics which is
centered on the core values of social justice, the well-being and sustainability of all life, and
economic stability. These values are not means to some further end, but are ends in themselves.
The ultimate goal is to provide guidelines for broader movements of community development.
Beginning at the local level, people can build new institutions by creating community
corporations that have these values written into their corporate charters, bylaws and articles of
incorporation. As the Mindful Economics movement grows, key businesses, financial
institutions, government agencies and labor unions in the local community can all be organized
along these values.
Drawing from the institutionalist tradition of Thorstein Veblen, Karl Polanyi, John K. Galbraith
and others, Mindful Economics is also based on the idea that economic institutions are embedded
within a broader cultural milieu. With a common set of shared values, these institutions can
embed themselves into the local community and cohere with other institutions. Together they can
evolve into broader economic systems. Magnuson’s paper is an effort to contribute to the
evolution of community-based systems in which economic activity is rooted in democratic
processes, socially controlled by an active citizenry, and shaped by core values shared by people
in their communities.
In his paper Do Our Economic Choices Make Us Happy? British economist Colin Ash
(University of Reading) overviews the academic literature on economics and subjective well-
being (or happiness). He warns that for about 150 years, economists were utilitarians. The aim of
policy should promote “the happiness of the greatest number”. The problem was then and still is,
how to measure happiness? One could simply ask people how they feel, and many surveys of
subjective well-being do just that. However without any means of making interpersonal
comparisons of reported happiness, these surveys give little practical guidance to policy-makers.
So from the 1930’s onwards, attention shifted towards a much easier, admittedly imperfect,
measure of welfare – GNP, the sum of a country’s income or spending or output.
Economic analysis of the relationship between income and happiness reveals a paradox: over the
past 50 years rich countries have become much richer, though people are on average not happier.
Within rich countries, the rich are much happier than the poor. However increases in income
have not made either group any happier. There is clear evidence of diminishing marginal returns
from increases in income, a consequence of both adaptation and social comparison. Many other
factors are shown to affect well-being, once basic material needs are satisfied. In particular, the
formation and fracture of high trust, close relationships have a more lasting impact on happiness
than does income.
Clearly many of our economic choices often do not bring us happiness. Colin Ash demonstrates
a remarkable symmetry between the conditioning process of dependent origination, which from
the Buddhist perspective explains unhappiness, and recent findings of psychologists researching
happiness. Both emphasize that individuals are endowed with and motivated by a fundamentally
incorrect theory of happiness: that it is achievable by pursuing desire. Both point to a case of
mistaken identity: that individuals identify with transitory (economic and other) phenomena.
Both draw attention to the prevalence of other “deep” cognitive errors which infect the process
of decision making.
The purpose of the Buddhist agenda is to stop suffering. As suffering, in the sense of
unsatisfactory conscious experience, is internal and conditioned, meditation is central to
Buddhist practice. Simple techniques are used to calm the mind and sharpen the awareness or
attention. The various components of dependent origination can then be observed more
objectively, in detail, and with increasing refinement.
Another strand of Buddhist meditation cultivates positive mind-states. This is the stuff of mood
control, by which one develops a positive attitude towards oneself and others, and a resilience to
fluctuations in one’s own fortunes. These practices have the therapeutic benefit of promoting
subjective well-being; at the deeper level of insight, they erode a concept of self which is
bounded, independent and permanent.
Buddhist meditation practice, like other therapies, has the potential to raise an individual’s
baseline level of subjective well-being. Meditative absorption brings a deep sense of enjoyment,
both affective happiness and ‘flow’. Nevertheless happiness is not the ultimate goal of
Buddhism. The cessation of suffering is. So Colin Ash’s conclusion is that Buddhism could be
viewed as a form of negative utilitarianism.
In his paper Gross National Happiness Dutch management scholar Sander Tideman (Global
Leaders Academy) discusses the concept of Gross National Happiness or GNH which was first
expressed by the King of Bhutan in the 1980s. Acknowledging that Bhutan may score low on the
scale of conventional indicators for a nation’s economic performance (like Gross Domestic
Product or GDP), the King claimed that his country secluded in the Himalayas would score high
on an indicator measuring happiness.
Sander Tideman’s paper takes the perspective that Gross National Happiness can be regarded as
the next stage in the evolution of economic indicators for sustainable development, going beyond
merely measuring values that can be expressed in money. GNH is an attempt to develop an
indicator that accounts for all values relevant to life on this planet, including happiness.
Moreover, by taking happiness as the objective, GNH serves as an important yardstick for a
framework of Buddhist economics.
The search for alternative indicators of economic progress is critically important at the time
when contemporary world faces a growing threat of ecological collapse due to climate change,
ecosystem loss and rapidly depleting natural resources. We can no longer rely only on
measurements such as GDP that only measures material and financial capital while ignoring
natural and social capital. Conventional economics and its indicators deliberately leave
phenomena such human happiness outside its spectrum, tacitly assuming that income per capita
growth is positively correlated to human well-being.
Breakthrough research in quantum physics, medicine, biology, behavioral science, psychology
and cognitive science is now making the science of the mind relevant to economics. Conversely,
from within the profession of economics, attempts are being made to broaden the scope of
economics into the domain of psychology, which led to the emergence of behavioral economics
and neuro-economics. Tideman’s paper explore what Buddhist psychology and philosophy,
which inspired the Buddhist King of Bhutan to conceive of Gross National Happiness, have to
offer to the shift in economic thinking.
In their paper The Application of Buddhist Theory and Practice in Modern Organisations